Mumbai (Maharashtra) [India], January 28 (ANI): The Covid-19 pandemic led to consumer demand weakness with total jewellery demand in India for 2020 dipping by 42 per cent at 315.9 tonnes as compared to 544.6 tonnes in 2019, the World Gold Council (WGC) said on Thursday.
The value of jewellery demand was Rs 133,260 crore, down by 22 per cent from Rs 171,790 crore in 2019. The gold demand for full-year 2020 was 446.4 tonnes compared to 690.4 tonnes in the previous year.
Total investment demand for 2020 was down by 11 per cent at 130.4 tonnes in comparison to 145.8 tonnes in 2019, according to WGC's latest Gold Demand Trends report.
In value terms, gold investment demand was Rs 55,020 crore, up by 20 per cent from Rs 45,980 crore in 2019. Total gold recycled in India during 2020 was 95.5 tonnes as compared to 119.5 tonnes in 2019.
"India's gold demand dropped by over a third in 2020, settling at 446.4 tonnes on the back of Covid-induced lockdowns and lifetime high prices," said P R Somasundaram, Managing Director for India at WGC.
"However, the drop was significantly lower when viewed in value terms, 14 per cent lower than 2019 as prices were up 34 per cent hovering around Rs 50,000 per 10 grammes for most past of the year," he said.
In Q4 2020, the festive period and the ensuing wedding season revived hopes and drew in jewellery demand worth 137.3 tonnes -- the strongest quarter in the year. Investment demand also showed significant resilience, growing 8 per cent to 48.9 tonnes.
Predictably, said Somasundaram, as lockdown eased and normalisation efforts were phased in, imports in Q4 rose 19 per cent year-on-year, pointing to the positive impact of pent-up demand.
"This can be expected to continue into 2021 as further normalcy returns and steady course of reforms strengthen the industry," he said.
On a global level, the pandemic and resultant market lockdowns led to a 14 per cent decline in annual demand to 3,759.6 tonnes. Last year was the first sub-4,000 tonnes year since 2009.
In Q4, global gold demand dropped by 28 per cent to 783.4 tonnes, making it the weakest quarter since the global financial crisis in Q2 2008.
While jewellery demand volumes are likely to remain relatively subdued as Covid-19 continues to impede the normal functioning of many markets across the globe, mass vaccination programmes and signs of improving economic indicators imply improvement in 2021.
Meaningful recovery in India and China will bode well for global demand as we head into 2021, said WGC. (ANI)